Thousands of holidaymakers who have booked a flight with BMI Baby are set for a refund as the budget airline faces closure.

A number of its routes will stop flying as early as next month, affecting thousands of passengers’ holiday plans.

Then, subject to consultation, the loss-making airline, which largely operates out of the Midlands and Belfast, is set to close in September.The owner of the company said it had to close the airline in the face of big losses.

Over: A number of its routes will stop flying as early as next month, affecting thousands of passengers¿ holiday plans.

Passengers who have booked with it will be offered a refund or be rebooked on to other BMI Baby flights.

This means, in theory, thousands of holidays could be ruined as families struggle to find suitable alternatives - especially if they have booked flights and accommodation separately.

They will not be offered a British Airways flight instead, despite the owner of the company being International Airlines Group (IAG), which is also the parent company of British Airways.

IAG bought BMI last month from German carrier Lufthansa and had hoped to sell BMI Baby but was unable to.